RiR,
Dropping $60 billion, as indicated in the report, into oil futures, will drive the price up (depending on the time frame). Derivatives are a legal form of gambling. Their prices are subjective, not based on supply and demand.
We agree some of the price increase is based on the fact that Shrub has destabilized the Middle East by attacking Iraq and routinely threatening Iran. He should have known this would occur. His Father certainly did and released the strategic reserve before GulfI. This prevented a spike.
Where does this derivatives trading money come from? No question much of it is bailout money provided by the Fed to failing banks & brokers, Bernanke's pals on Wall Street (insiders). Brokers and Investment Banks have been given this freshly printed money @ 1-2% interest in order to play oil futures. The Fed has already dropped its entire $500 billion reserve into the marketplace and is still printing money. Morgon-Stanley has bought and taken possesion of the Northeasts heating oil supply. But most of these transactions are secret.
These traders lead a priviledged life, cheap capital, Government guarantees. If a majority of them "think" the price is going up, it automatically goes up. These markets operate as a private tax system. If they can't make money,they go out of business,but in many cases they never take possession of the oil. These facts have nothing to do with supply and demand, or the free market model. Big fish eat little fish. Like the Government, with enough money, they create their own reality.
Case in point. Big oil and GM bought Oshevsky's battery company. They replaced California's Air Board Chairman and crushed thir electric cars, and took his large capacity batteries off the market, so that noonecouldhav them. Meanwhile, Exxon has launched an ad camapign claiming they don't have the technology yet, but are working really to bring it to us. They did all this to extract maximumrevenue from their oil monopoly before permitting us to have any other options.
The free market is a model and useful tool to begin the study of economics. But it is far too simple to explain what really goes on in this world. In the real world Rockerfeller, JPMorgan, Gates, Rothschild et al, use their capital and monopolistic market power to maximize their profits. Gramm, Clinton, Bush and McCain have all used their political power to implement deregulation and the results have been disasterous. For the last year, supplies and prices have been up, but there is an election coming up and these crooks want their favorite partners in crime to win.
Bernanke's next problem is an $11 trillion bailout of deregulated Banksand S&Ls. Just keep printing money and hold a gun to the rest of world's heads. How long can a failure to produce real goods and services continue?
Its all bullshit and its bad for you.
